Obama flexible on climate legislation

By IBT Staff Reporter On 04/09/09 AT 12:55 AM

President Barack Obama will be flexible about climate change legislation moving through Congress, the White House said on Wednesday, indicating some wiggle room on his demand for full auctioning of carbon emissions permits to industry.

The president has asked Congress to send him comprehensive energy legislation that would spur a transition to a clean energy economy, create thousands of green jobs, and wean us of our dependence on foreign oil, spokesman Ben LaBolt said.

Members of Congress are looking at a variety of policy options to help us make that transition, and the administration will be flexible during the policymaking process as long as those larger goals are met.

Obama, a Democrat, is pushing for the creation of a cap-and-trade system to reduce emissions blamed for global warming.

Cap-and-trade systems operate by the government setting a limit on the amount of carbon dioxide or other greenhouse gases that factories and other polluters produce, and allowing them to buy or sell permits with the right to release more.

As a presidential candidate, Obama called for 100 percent of permits to be auctioned, rather than given free of charge, to participants in such a system.

Since taking office Obama has indicated he may not stick to the 100-percent goal, though LaBolt said the president would still be pushing for it with lawmakers.

Meeting with business leaders in March, Obama said that if auctioning requirements were too onerous, it would defeat the purpose and be hard to implement politically.

The European Union, which is already operating a formal carbon dioxide emissions trading system, found that giving permits away led to windfall profits at utility companies, which largely pocketed the value of the permits while passing on higher costs to consumers.

Democrats in the U.S. House of Representatives launched a sweeping effort in late March to control greenhouse gas emissions, which includes a cap and trade program.

Republicans say the proposal would push energy prices higher and result in more domestic job losses.